There are several issues facing today’s economy affecting job availability and increasing costs for both consumers and business owners alike. These are issues that receive daily, even minute-by-minute, coverage in the media and are on everyone’s minds.
There’s another major issue facing small business owners that has seemingly flown under the public’s radar, yet it is something we carry around with us every day in our wallets. Credit card interchange fees – also known as transaction fees – are out of control.
Every time a business swipes or types in a customer’s credit card information, they are charged a transaction or interchange fee by the credit card company. As the former owners of The Depot Food Store #1 in Carencro for 17 years, we grew familiar with the minimum 3 percent transaction fee we were assessed when swiping a card.
This may not seem like an astronomical amount, but consider that a convenience store – or any retailer for that matter – serves many customers each day. These fees snowballed into a substantial monthly cost for our business.
The irony was that, as owners of a convenience store, we were forced to pass this inconvenience along to our customers through increased prices and refusal of certain types of credit cards. This practice would periodically harm our success, and our customers would stop coming until the larger chains were forced to make similar changes.
It wasn’t just us: did you know that Americans spent $48 billion in interchange fees in 2008? That’s quite a snowball. And in these though times, credit card companies are also taking advantage by increasing these fees and levying new ones, hiking interest rates and changing their account policies.
Congress tried fixing these problems last year by passing legislation to stop these practices, but the credit card companies continue to get around them. Many companies here in town, including our son’s small business, face these fees every month. Senators Landrieu and Vitter must do something.
Cheryl and Brian David,
Former owners, The Depot Food Store #1